There are many options when it comes to debt relief. It is crucial that you know your options, and understand the effects each choice may have.
Debt Settlement is a reasonable and logical option for consumers. Settlement involves negotiating with your creditors so they accept less than the full amount of the debt owed to them. The attorney firm will help settle your total outstanding unsecured credit balances significantly, in most cases, negotiating the entire balances. (click here for more information)
Credit counseling combines all your debts and creates one monthly payment, where, typically the interest rate is lowered. These programs in general take 5 years, depending on your debt, and generally do not significantly lower your monthly payment. The consumer advocacy group Consumers for Responsible Credit states that credit counseling programs achieve only about a 20% completion rate, on average. (click here for more information)
There was a time when bankruptcy was the only alternative for consumers caught up desperately in debt. Pressure from collection agencies often drove people to resort to bankruptcy. The bad news, according to CNN Money, is that even bankruptcy can stay on your credit report for up to 7-10 years. Your bankruptcy discharge can also appear in public court records for up to 20 years which can affect future plans such as buying a home or vehicle, securing employment, obtaining insurance, or getting security clearance. In most cases, you should only consider bankruptcy as a last option. Anyone considering bankruptcy should consult a bankruptcy attorney. (click here for more information)
As stated in The Consumer Reports Debt Consolidation loans do not reduce your debt; this type of loan combines all of your debt and attaches a lower interest rate. Bottom line, all you are doing is exchanging one debt for another at a lower interest rate. A risk is that when applying for a debt consolidation loan you typically will be asked to secure the loan against some form of collateral, usually your house or car. The problem is that this transfers your unsecured debt to a secured loan, which puts your personal possessions at risk if you are unable to make payments. A home equity loan can be extended out over as long as 30 years.
TAB - Is credit counseling right for me?
Credit counseling will combine your unsecured debt payments into one convenient monthly payment, possibly lower your interest rates and monthly payments, and work to stop fees while you are in the program.
Will credit counseling stop creditor phone calls?
In most cases, credit counseling agencies have an agreement with creditors to stop creditor calls after approximately 90 days, in most cases. As long as you maintain your payment arrangements with the selected agency, you should experience relief.
Do most creditors agree to the proposed terms?
Yes, most creditors have predetermined terms that they will agree to. However, if for some reason they do not, the agency will still work with them to reduce your payments.
Why will creditors lower payments & interest through the agency and not with me?
The agency represents a large number of consumers in similar situations and has greater leverage to negotiate on your behalf. The agency has an established working relationship with the creditors and together work to get you the lowers payment available. You can work directly with your creditors, however many times you will not enjoy the lowest interest rate or monthly payment available.
How long will credit counseling take?
This program is different for everyone as the length of the program is determined by the
amount of debt enrolled. However, having your most recent statements available at the time
you call the Enrollment Agent will help to determine your unique program length.
What happens after I have submitted my information?
A counselor will contact you to discuss the details of your proposed credit counseling
program. They will assess your financial situation, assist in creating a spending plan, and
discuss options for debt repayment
What type of ongoing customer support can I expect?
After you make your first payment, the support team is available to guide you through the
process. As a client, access to detailed information about your repayment program is available
anytime by accessing this web site or our customer information line.
What is the cost of credit counseling?
Normally, there will be a onetime set-up charge and a monthly fee to contribute towards the
cost of administering the program. Your first deposit is not held. If your feel that a fee
will be too much of a burden for you to pay, talk to our support team. If you qualify under
the U.S. Department of Health and Human Services poverty guidelines, you may be eligible to
a fee waiver.
Do I have to include all unsecured debts in credit counseling?
The purpose of this program is to help you get out of debt. To do this, it is important that
no further charges are made while are on the program.
How does credit counseling reflect on my credit report?
If your budget doesn't permit you to pay full payments, your creditors might report you are
not paying as originally agreed. The creditors may also report to the credit bureau that you
are going through a program that requires a third party to assist you and every creditor will
view this differently.
In general, debt consolidation is a process that can help you to overcome your financial problems by helping you work through a program to repay the high interest rate loans you may have. Debt consolidation makes repaying your bills easier. Instead of making multiple payments to multiple creditors, the program lets you make one payment once a month that will cover all the others.
The CredEx Choice debt consolidation program involves a cooperative relationship with your creditors. By participating in our program, creditors receive certain tax benefits, which give them the incentive to make concessions that they otherwise would not offer to you directly. The benefits to you are:
Finding a budget that works for you
One monthly payment instead of multiple payments to multiple creditors
Lower interest rates, which means more of your monthly payment goes toward paying the principle
Becoming debt-free within 4 years, not the average 22 years it takes to repay a credit card account
Improved credit scores
Contact us today for more information on how the CredEx Choice Debt Consolidation program could help you get back on the path to financial freedom and peace of mind..